How A Poker-Game Brainstorm Produced Fintech Startup YapStone And $235M In Revenue

October 21

[“How A Poker-Game Brainstorm Produced Fintech Startup YapStone And $235M In Revenue” originally appeared on Forbes and is written by Amy Feldman.]

Back in 1999, Tom Villante, a former investment banker at S.G. Warburg and a partner at private-equity firm The Seidler Co., was sitting around with a few buddies playing poker and talking about businesses they could start. As the cash moved around the table, Villante recalls, the conversation turned to PayPal and markets that might move away from getting payments by check. “I didn’t want to do anything that couldn’t scale,” he says.

So Villante, now 48 and the company’s CEO, started YapStone, jauntily named after the currency stones used on the island of Yap in Micronesia. Villante started by targeting large apartment REITs, with a hundred thousand units or more, doing not just the payments, but the complex accounting required to deal with prorated rent, security deposits and eviction proceedings. At the time, he recalls, he was fighting an industry that still relied on paper checks.

Today, the Walnut Creek, Calif.-based company offers a secure online payment service for transactions to vacation homes, through clients like HomeAway and VRBO, and multi-family apartment rentals. In addition to those businesses, YapStone also offers online payment processing for churches called ParishPay, which serves more than 1,000 parishes across the United States.

While there’s lots of competition in the online payment space, including major players like PayPal (2015 revenues $9.2 billion) and Stripe, YapStone’s focus on certain large, niche markets has given it an edge. “Our strategy is to be all things payment for the largest marketplaces in the world,” Villante says. Identified in 2015 by FORBES as one of America’s most promising companies, YapStone expects to process more than $15 billion in total payment volume this year with revenues estimated at $235 million. With $50 million in equity funding from Accel Partners, Meritech Capital Partners and others. YapStone, an under-the-radar near-unicorn, made the cut for FORBES recent list of 25 Next Billion-Dollar Startups. “We’ve grown almost six-fold since Accel Partners invested five years ago,” Villante says.

Now, YapStone is looking at international expansion. It recently opened an office in Drogheda, Ireland, and hired Peter Rowan, a former exec at Twitter and PayPal, to run its international operations. “When I first started this business, people’s eyes glazed over. Now it’s fintech. It’s sexy,” Villante says. “Our goal is to be at $1 billion in revenues by 2020.”